By Allison Lampert and Nivedita Bhattacharjee
(Reuters) - Bombardier Inc <BBDb.TO> scaled back CSeries jet deliveries by around a third because of engine delays, but said on Thursday it received its first order for the narrowbodies in 18 months, helping send shares up 4 percent.
Engine delays, which reduced CSeries deliveries from 30 to an expected 20 to 22 this year, are a "short-term issue" that supplier Pratt & Whitney is "actively addressing," Bombardier Chief Executive Alain Bellemare told analysts.
Pratt & Whitney, a division of United Technologies Corp <UTX.N>, said in October it was resolving issues with the geared turbofan (GTF) engines that power the CSeries and Airbus A320neo to make them more durable.
Bombardier said the delays would raise its free cash flow usage for 2017 to about $1 billion, at the higher end of its forecast range.
Shares were up 4.7 percent in morning trading to C$2.92.
The Canadian plane-and-train-maker also said it received a letter of intent from an unnamed European customer for 31 firm CSeries orders.
European planemaker Airbus SE <AIR.PA> recently agreed to take a majority stake in the CSeries program for $1, in a deal expected to improve CSeries sales and reduce costs.
Bellemare told analysts the Airbus venture, while boosting "sales momentum" for the CSeries, isn't directly "linked" to the order which the company was already working on and would be valued at about $2.4 billion based on list prices, with an additional 30 options.
Some analysts were anticipating orders because of increased confidence in the CSeries from the Airbus deal, which closes in 2018. A European customer won't face potential duties stemming from a trade dispute with Boeing Co. <BA.N>
"We'll have to see who the new airline is, but it certainly sounds promising, particularly since it isn’t subject to the US duty," said Teal Group analyst Richard Aboulafia.
Bellemare said the company was weighing strategies like forming partnerships to boost volumes of its smaller aerostructures division, which makes components for planes like the CSeries.
Bombardier reported third-quarter earnings before interest, taxes and special items (EBIT) that surged 90 percent to $165 million and a loss in line with analysts' expectations.
It expects full-year EBIT of at least $630 million, which is at the high end of its forecast of $580 million to $630 million.
Bombardier, which is in the middle of a five-year turnaround plan after facing a cash crunch in 2015, delivered 31 business jets in the third quarter ended Sept. 30, compared with 36 in the same period last year.
(Reporting by Nivedita Bhattacharjee and Allison Lampert; Editing by Bernadette Baum)